Maureen Hayden-Cater, managing director, JN Bank speaks during the sixth annual Anti-Money Laundering/ Counter-Financing of Terrorism by the JBA. The event was held at the Spanish Court Hotel, New Kingston recently.

Managing Director of JN Bank, Maureen Hayden-Cater, has urged financial institutions to be careful; and not to allow Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regulations and standards to affect financial inclusion.

Speaking recently at the Jamaica Bankers’ Association’s (JBA) AML/CTF Conference at the Spanish Court Hotel in New Kingston, Mrs Hayden-Cater called her colleagues, to find creative ways to educate the Jamaican population about AML/CTF requirements in an effort to raise confidence in local banks, which she acknowledges have taken a battering in recent years.

“In the final analysis, we want to have confident customers, who are certain about the services they receive from our banks; and other deposit-taking institutions,” she advised. “And the more confident clients are about banking, the more banking they will do; and, also increase their demand for additional products and services.”

The JN Bank managing director, said that although AML/CTF standards are necessary, financial institutions can and must do more to assist their customers to understand the reason for the requirements. She said this will also assist in reducing some people’s need to borrow from non-regulated financial entities, which include those institutions that make the process of accessing financing less onerous; but charge exorbitant interest on loans.

“If you talk to your customers they will tell you, I only have one form to sign at these other financial institutions; however, when they come to the bank they have a whole lot more forms to sign.”

“The AML/CTF standards are viewed as a burden to customers, who do not understand these laws and regulations. All they encounter are the forms they need to complete; and what seems to be intrusive information that they must provide, to access banking products and services,” she related.

“As simple as it may sound, many of these matters affect financial inclusion; and efforts to increase savings in a country where savings are very low,” Mrs Hayden-Cater said.

Citing information from the Singapore-based EconomyWatch.com, the JN Bank Manager, noted that the country’s gross national savings, as a percentage of its gross domestic product (GDP), is 15.9 per cent, which is much smaller when compared to that of Trinidad and Tobago, where the percentage is close to 25 per cent and China where the rate is more than 47 per cent.

She pointed out that there is still a large percentage of Jamaicans without bank accounts; and many who have accounts, but don’t use them, due to the Know Your Customer requirements they must provide to gain access to the accounts.

“Although AML/CTF regulations are there to protect us and our customers, in some ways the requirements to keep our sector “clean” makes the process of banking tedious and intimidating, especially for those segments of our population, who struggle with literacy and financial literacy,” she said, underscoring that the standards create unintended consequences.

She stated that, "There are still persons who are apprehensive about going into a bank to open an account, because it means they will need to complete forms; and encounter subject areas, which they do not understand.”

Mrs Hayden-Cater maintains that beyond training employees in AML/CTF standards, banks and other financial institutions need to educate staff members about how to explain the requirements, so that customers can understand the value of providing the information required.

However, the JN Bank managing director, who is also a former two-term president of the Jamaica Bankers Association, said banks and financial institutions can also leverage technology, and carefully explore the establishment of a centralised mechanism, through which banks and deposit-taking institutions can share customer information to assist with making processes more efficient for customers.

“As a customer, you already have an account at NCB and want to open one at BNS and you will need all of the same information. Is there an opportunity for us to develop some kind of centralised repository, so that we can access this repository rather than ask the customer to complete another set of forms?” she posited.

Mrs Hayden-Cater said institutions should also consider mounting a collaborative national educational campaign of the calibre of any other advertising campaign it would have done to promote its individual products and services, to educate the public about AML/CTF standards.

At the same time, she says that financial institutions should seek ways to make the process simpler, especially for those customers who are already known to them. She said forms can be completed for customers to ease the burden on them, leaving them only the opportunity to read it and sign.

“In that situation, we should always ensure that the customer reads the document carefully prior to signing; and ask questions, so that they are certain they fully understand what they are agreeing to,” she advised.

The banker emphasised that AML/CTF standards and regulations are necessary parts of what banks need to maintain their place in the global financial ecosystem; however, implementing measures to reduce the burden on customers will also help to reduce the unintended consequences of the regulations.

“It will raise confidence in banks and other financial institutions, which is what we need to increase the saving and investments levels, which will consequently lead to growth in the sector,” she maintained.